A Prudent Approach To Social Security’s Future

During
Ronald Reagan’s 1980 presidential campaign,
the Republican Party ran a striking advertisement on television,
depicting a man closely resembling House Speaker Tip O’Neill
puffing a foot-long cigar while driving a large car. As the
auto sped along, the other passengers in the car recurrently
warned the Speaker that the car was in danger of running
out of fuel, to which the Speaker chuckled arrogantly and
accelerated. Run out of gas? Never! The commercial concluded
with thecar sputtering to a halt, to the bafflement of the
white-haired driver. A voice-over intoned that for years
concerned voices have warned that Social Security is going
bankrupt, and that it is high time to address the continued
health of that program.

And that was the last time anything was mentioned about
prospects for reforming Social Security funding, until the
privatization suggestions put forward by George W. Bush.
During the nearly two-and-a-half decades since the famous “Tip
O’Neill in a car” commercial, Social Security
has been regarded as the “third rail” among American
political issues: touch it and die. Let any well-meaning
political figure suggest any sort of reform and he knows
that he risks the end of his career in public service, at
the hands of senior voters inflamed by political demagogues.
Let any well-meaning social critic or economist publish suggested
reforms of Social Security and he knows that he will be instantly
castigated as a heartless cad who wants to throw America’s
grandparents out into the winter snows, bereft of the “earned
right” and “insurance protection” for which
they had worked so hard. Factor into this hazardous maze
of issues surrounding Social Security reform the fact that
many (perhaps most) conservatives both recognize the program
as a vast Ponzi Scheme inaugurated by deceitful means during
mid 1930s—and want to ensure that they get
their own slice of the pie upon reaching retirement age.

And now the time is fast approaching when it will be time
to pay the piper. In Social Security: False Consciousness
and Crisis, the late economist and social critic John
Attarian strides purposefully into the arena, not to cut
and thrust at the system’s purpose and existence, but
rather to calmly examine the truths about which Social Security
came into being, the assumptions by which it is sustained,
and the comfortable lies that make its coming alteration
or demise certain. “The brutal truth,” he has
written elsewhere, “is that Social Security’s
prospects are so bleak, and we have evaded reality for so
long, that a cheap, painless solution is not possible. Beneficiary
or taxpayer suffering is inevitable and necessary. Our first
task here is to look reality in the face. That means admitting
that you can’t get something for nothing.”

As Attarian notes in the work at hand, “Social Security’s
depiction and financing mechanism, and the sense of entitlement
that they foster, [have] created a powerful and pervasive
false consciousness about Social Security.” The term false
consciousness is an analytical tool used by the author
to indicate a disconnect between understanding and reality.
It is a term Marxian in origin, but refurbished and put to
work by Attarian to outline the nature of many Americans’ false
understanding of Social Security’s realities. Succinctly
stated by Attarian, the false consciousness that governs
the state of Social Security, entails many things: “its
nature (insurance), revenue source (premiums or contributions),
funding mechanism (with trust funds), the character of one’s
claim (immutable earned right, guaranteed by law), and the
arrangement the program reflects (compact between generations,
implicit contract).”

Attarian addresses each of these misconceptions in turn,
marshalling an impressive array of statistics drawn from
both private and public sources and a relentlessly logical
answering of each perception.In doing so, he coolly defenestrates
the hollow defenses that Social Security’s stand-patters
have erected over the course of many decades. In short order,
these myths are holed at the water-line, with Attarian showing
that Social Security, contrary to the received wisdom, is
not an insurance fund, a contract, a trust fund, or a pension
fund hermetically set aside for future needs; that benefits
are not an “earned right”; that retirees who
have paid into the system do not own their own benefits;
and that any correspondence between what one pays into the
system and what one is paid in benefits is entirely tenuous
and arbitrary. Worse yet, as the author demonstrates, any
steps taken to “solve” the problems facing Social
Security will not be small or painless. Minor tax increases
will not serve, nor will benefit cuts, nor will a combination
of the two. In short, there is little security in the future
of Social Security, what with members of both major American
political parties unwilling to take a long, hard look at
the system while playing a classic game of keeping up appearances.

As Attarian notes, the Social Security program, which taxes
incomes on a “pay-as-you-go” basis to fund benefits
to retirees, their survivors, and America’s disabled
citizens, faces an undeniable crisis. This will occur—and
has, in fact, begun—as the large generation of Baby-Boomers
retires and collects benefits, supported by the smaller generation
of taxpayers born after the mid 1960s. Simply put, as the
number of ratepayers that support each Social Security beneficiary
dwindles, tax rates mandated under current law will not suffice
to pay the full benefits also mandated under current law.
The prospects for those citizens looking forward to collecting
benefits is grim, with reliable estimates indicating that
by 2041, Social Security will be unable to pay full benefits
on time. The program will be able to cover only 73% of projected
costs. To which the Tip O’Neills of both major American
political parties, as well as their constituents, chuckle
condescendingly, in scornful disbelief—with some denying
this will happen, and others openly declaring that because
they themselves will be deceased by 2041, the challenges
of Social Security will be someone else’s problem.

What can be done about the future of Social Security? In
response to this question, Attarian offers as hisfinal chapter “A
Modest Proposal.” Here, he notes that any prospect
for reform is contingent upon a change in belief and character
among American taxpayers, who have by and large, embraced
the religion of what might be called Economism: the belief
that man is an essentially economic creature—not a
spiritual being, with concerns beyond the present age—and
that the chief end in life is an existence marked by economic
plenty, a comfortable retirement, and the avoidance of work
and community as distractions that vex the autonomous self.
In contradistinction to this, Attarian writes, “We
must radically rethink our beliefs about life, reality, and
our purpose and destiny. We must accept limits on what life
can feasibly give us, and demand less, consume less. A way
of life grounded in self-restraint, perspective, and checks
on appetite is not only moral and psychological wisdom, but
in a limited world, political and economic wisdom as well.
The only sound answer to insecurity, suffering, and mortality
is to accept them as our lot, and learn the truth divined
by William Blake:

Man was made for joy and woe;And when this we rightly know,Thro’ the
world we safely go.”

Exactly so. E. F. Schumacher would smile in recognition
at this statement. Much as we in the United States would
like to believe otherwise, life was never intended to be
a painless affair, devoid of hard decisions, peaks and valleys.
In this conclusion and throughout Social Security: False
Consciousness and Crisis, Attarian has crafted an entirely
spot-on analysis of the problems facing Social Security and
suggests hard but sensible remedies not for ending the program
but for mending it—beginning with repeal of the Social
Security Act of 1935 and its replacement by a tightly administered
program paying Social Security’s benefits to current
retirees and Baby Boomers based on presumed need, with benefits
for better-off beneficiaries cut or eliminated. Other well-argued
strategic points are outlined as well, among them a recommendation
to abolish payroll and self-employment taxes, financing the
foregoing benefit with general revenues instead.

Attarian is to be commended for standing in the breach and
declaring truths that may well be ignored by the wise of
this world but are urgent nonetheless—and for carrying
off this task with clarity, style, honesty, and imagination.

James E. Person Jr. is the author of Russell
Kirk: A Critical Biography of a Conservative Mind (Madison
Books, 1999) and Earl Hamner: From Walton’s
Mountain to Tomorrow (Cumberland House, 2005).